Ralph Acampora, who is often known as the godfather of technical analysis, tends to be bullish on stocks. But on Thursday, as the major averages all dropped more than 1 percent, he expressed a massively bearish view on U.S. equities.
On "Futures Now," Acampora predicted that the S&P 500 would drop "10, maybe 15 percent between now and maybe October," but said it would be much worse for small caps, mid-caps and tech stocks.
"If you ask me about the Russell and the Nasdaq Composite and the S&P MidCap, I think you're talking about 20, 25 percent. And I call it a stealth bear market going on."
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The charting guru, who is director of technical research at Altaira, says he's reminded of the way markets were behaving 20 years ago.
"The last time I saw anything like this was in 1994, when the Dow and the S&P were in a 10 percent trading range all year, and then under the surface they were just ripping them apart. I have a sick feeling that we might be doing that again," he said.
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Indeed, while the S&P only fell 6 percent from the highs of March 1994 to the June lows, the Nasdaq plunged 14 percent in those three months.
Part of the issue as Acampora sees it is that stocks have simply gotten overextended.
"A melt-up actually began in December of last year and carried into the first quarter of this year, and a lot of the favorite stocks, like Facebook and Amazon and all those, were way ahead of themselves. And I think we have to unwind that. I don't think we're even close to unwinding that excess. So I think the market was ahead of itself going into this year, and that's what bothered me then, and it still bothers me."
That said, after equities decline into fall, Acampora believes the fourth quarter "will be very, very strong."
But if Acampora is right, then the road to eventual higher prices will be an exceedingly rocky one.
—By CNBC's Alex Rosenberg.
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